Mothercare warned of challenging trading in the UK and across the eurozone as it reported a 3.4% fall in quarterly sales.

Shares fell more than 6% after the loss-making mother and baby goods retailer warned that the downbeat sales outlook would continue for the rest of the year. In the UK, it reported a steep decline of 7.9% in the 15 weeks to 13 July, although store closures accounted for most of that fall.

The retailer said its home market was very competitive, adding that sales of toys, home and travel goods in particular had been hit by heavy discounting among its competitors.

Simon Calver, the chief executive, however, said it was ready to capitalise on the arrival of the royal baby, due any day. He said Mothercare had put together a celebration range that included "Born to Rule" sleepsuits and "Princess/Prince in training" bibs and vests. The flagship Oxford Street store in central London will be transformed to mark the occasion.

"It's hard to gauge what sort of increase we have. I think there will be a feelgood factor and who knows, in nine months' time, there may even be a tick-up in the birth rate," Calver said.

Mothercare, which also owns the Early Learning Centre, said it closed 13 loss-making stores in the first quarter. It now has 242 stores in the UK, with 192 Mothercare shops and 50 ELC shops.

Calver also weighed into the business rate debate, as he said rate levels played a role in determining which stores to close. He said: "We base each closure on the contribution of each store and of course business rates play a part in that. There needs to be a rates freeze or action by the government because it is damaging the high street."

Reacting to comments by the chief executive of Ocado, Tim Steiner, that bricks-and-mortar retailers should shut more shops and stop moaning, he said: "We're too busy to moan and our job is about keeping Mothercare running."

Elsewhere in the results, clothing sales in the UK were boosted by the Value Essentials range, introduced in July last year.

The retailer said that while it still had "a way to go", it was working to transform the UK business.

Mothercare's international business fared better, with sales up 14.1% following a 14% increase in trading space in the first quarter. It opened a net 47 stores during the period and now has 1,116 franchise stores across 60 countries.